Solutions for the oil and gas industry

GE Oil & Gas (Nuovo Pignone) has experienced outstanding growth since 1994, when Italian company Nuovo Pignone was acquired by American multinational General Electric. Since then the Oil & Gas division has become increasingly important for the American giant, as Barbara Rossi learns.

General Electric, set up in 1878 by Thomas A. Edison, is today a multinational company operating in a wide range of sectors, ranging from energy to financial services, medical diagnostics imagery, aero engines, television programmes and plastic materials. Its aim is that of producing technologically innovative solutions to solve the most complex problems encountered in daily life, and in this endeavour the group operates in 100 countries, employing 300,000 people. GE has been present in Italy since 1992, where it operates through four macro-divisions, with 15 sites and 7000 employees, and has invested €70 million in R&D in the country.

Nuovo Pignone also has a long history, as it was established in Florence in 1842 as a cast-iron foundry, called Pignone. In the early 1900s it started producing reciprocat-

ing compressors and engines. After experiencing a difficult patch over the World War II period, the company was acquired by ENI and became Nuovo Pignone. Finally there was the GE takeover in the 1990s, which led to a very successful future.

The global headquarters of GE Oil & Gas (Nuovo Pignone) are in Florence, Italy. This is a clear sign of the importance that Nuovo Pignone has in the Oil & Gas division of General Electric. In fact, Nuovo Pignone is at the head of the GE division, accounting for about 80 per cent of total business turnover. When, in 1994, GE acquired Nuovo Pignone, an Italian leader in the production of turbines and compressors for the oil and gas industry – GE acquired an 80 per cent stake at the time, increased to 100 per cent in the following years. The group was not a specialist in oil and gas, but from 1998 the American multinational initiated a campaign of acquisitions in the sector, purchasing companies in France, the UK and the USA, thus creating a completely new oil and gas business division centred round Nuovo Pignone and bearing the name of GE Oil and Gas.

The decision to acquire Nuovo Pignone was a winning choice for both parties, first because Nuovo Pignone was already a GE supplier and also because Nuovo Pignone has enjoyed a series of advantages due to becoming part of the GE group: being able to offer a complete range of products and services, having greater visibility and gaining access to the wide range of talent and technologies present in the group itself. Since the 1994 takeover the oil and gas turnover has grown tenfold, reaching €10 million in 2011, while the number of employees has seen a

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15 per cent increase, tallying 4500 people at the end of the same year.

This division is today a global leader supplying advanced products, services and complete solutions to the oil and gas industry, starting from the well-head to the refining and related petrochemical and plastic industries. The division supplies all the major oil multinationals, as well as state-owned companies in different countries. GE Oil & Gas operates in various countries, following the markets of its customers, including former Soviet states, African countries, North America, China and India, as well as European countries.

Towards a very bright future

The future of the oil and gas division is very promising. In fact, considering the importance that shale gas will have as an energy source in years to come, both in the USA and in other regions, GE Oil and Gas to lead the shale gas revolution is a winning asset. Moreover, thanks to its innovative products, the division has identified a real potential for supplying gas turbines in Africa. Oil & Gas is in fact the fastest growing business of the group, with revenues of $15 billion and earnings growing at 16 per cent.

Furthermore, GE Oil and Gas shares the same focus on R&D as the rest of GE, which is the seventh most valuable company in the world. Investing in both capability and people, continuously developing cutting-edge products, the division will launch 10 new gas turbines during this decade, significantly more than it ever did in the past. In addition to this, it has launched the first subsea compressor, creating an industry-leading position. There are electric submersible pumps (ESPs) to extract oil from mature fields, a technology which GE is further enhancing and which is currently able to operate at a depth of up to

12,000 feet and at temperatures up to 230˚C. The division also supplies the AGP system (Flex Efficiency Advantage/Advanced Gas Path), offering improvement of gas turbine output by up to 4.8 per cent, reducing fuel consumption by 1 per cent and lessening the environmental impact.

In Italy, specifically in Avenza, GE Oil & Gas manufactures industrial modules and pre-assembled units, designed in-house, which are then supplied to customers all over the world. These are turnkey power generation and compression solutions to increase efficiency, reliability and power in restrictive areas. They are particularly important because new reservoirs are usually in remote locations, often with environmental restrictions and extreme climates. The modules are delivered to customers fully connected and wired and offer benefits in terms of a small footprint, high power-to-weight ratio and the ability to increase productivity levels quickly and significantly. n